SNB playing a role in reducing CHF strength – MUFG

Analysts at MUFG Bank point out that the Swiss National Bank (SNB) has been in the markets keeping the EUR/CHF pair above 1.0500.

Key Quotes:

“Based on the weekly Swiss banks’ sight deposit totals, a proxy for CHF selling by the SNB, intervention picked up notably since the start of March – jumping by CHF 41bn. The most recent week sight deposits increased just CHF 3bn, the smallest increase since early March.”

“The intervention in EUR/CHF has kept EUR/CHF stable just above the 1.0500 level. But this intervention looks to be playing a role in limiting general CHF strength.”

“The correlation between another risk asset, gold, had been quite strong but has recently broken down in line with the pick-up in intervention by the SNB.”